Australian Property

Viewing posts in the Australian Property category

Investor mortgage growth keeps on rising

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen The Reserve Bank of Australia (RBA) today released its private sector credit aggregates data for the month of January: A chart showing the long-run breakdown in the components is provided below: Personal credit growth (0.0% MoM; 0.0% QoQ; 0.8% YoY) remains in the gutter, whereas business credit growth (0.8% MoM; 1.6% QoQ; 5.5% YoY) and housing credit growth (0.6% MoM; 1.8% QoQ; 7.1% YoY) are stronger, but remain below their long-run average growth rates (although housing credit is still growing more than twice as quickly as wages and off a ginormous debt...
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Melbourne property “so far out of whack”

ScreenHunter_02 Apr. 23 10.34 By Leith van Onselen If you get a spare 10 minutes today, make sure that you listen to the above interview with property developer/investor, Michael Drapac, from Tuesday's Mornings With Jon Faine show. Drapac is a prominent developer/investor that has been in business since the 1970s. In the mid-2000s, he held the biggest portfolio of CBD land in Melbourne (now sold-off). And now, he holds a multi-billion dollar land portfolio in South Eastern United States. According to Drapac, Melbourne is home to one of the world's biggest property bubble, and anyone that "believes this time is different...
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Hewson: foreign property restrictions “jingoistic”

ScreenHunter_6248 Feb. 26 15.11 By Leith van Onselen I have a lot of time for former Liberal leader, John Hewson. But his comments yesterday afternoon about the Abbott Government's tightening of the foreign investment regime pertaining to residential property are ridiculous: “It may help first-home buyers in the market for new apartments, where there has been a lot of foreign investor interest, it seems mostly to do with that, but I think there may be a jingoistic element to it, for the government to be seen to be doing something about foreign investment,” he said. “But how far can a country like Australia, totally...
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High density housing’s biggest myth

ScreenHunter_07 Feb. 10 11.46 By Ross Elliott, author of The Pulse Advocates of higher density housing development in Australia’s major cities – inner city areas in particular - are fond of pointing to a range of statistics as evidence of rising demand. Dwelling approvals, dwelling commencements, tower crane counts and various other sources, both reputable and dodgy, are referenced and then highly leveraged to support claims that our housing preferences have fundamentally changed in favour of high density apartments. But what’s the one inescapable fact that these advocates are missing? “Higher density living on the...
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RP Data weekly Australian house price update

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen In the week ended 26 February 2015, the Core Logic-RP Data 5-city daily dwelling price index, which covers the five major capital city markets, rose by 0.22% (see next chart). Home prices rose in rose in all major capitals except Perth (see next chart). So far in February, home values nationally have risen by 0.33%, with values in Sydney, Melbourne and Adelaide rising and Brisbane and Perth falling (see next chart). Since the beginning of the year, home values have risen strongly in Sydney and Melbourne, are up slightly in Brisbane, and have fallen elsewhere...
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Residex: House prices fall despite Sydney boom

ScreenHunter_15 Mar. 05 15.42 By Leith van Onselen Residex has released its house and unit price results for January, which revealed a 0.55% fall in house prices nationally, but a 0.59% rise in unit values: As shown above, performance was mixed with the two biggest capitals - Sydney and Melbourne - continuing to lead the way, driving values nationally. According to Residex, Sydney is experiencing bubble-like conditions with median house values rapidly closing in on $1 million: The median value of all houses in Sydney is now a staggering $911,500. Growth in dollars for the month was $11,000. Sydney home owners are...
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Property spruikers flip to foreign buyer crash alert!

ScreenHunter_6219 Feb. 26 07.17 By Leith van Onselen The AFR and The Australian are today running articles warning that the Abbott Government's planned crackdown on foreign investment into residential real estate (summarised here) could "shock the market". Here's The AFR: Ray White Real Estate chairman Brian White said the plan, announced on Wednesday, which will raise $200 million, was a shock. “The amounts now proposed have the potential to shock the market – and no market appreciates or responds well to shocks,” he said... CBRE residential projects chairman Justin Brown also said the new taxes were...
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Highlights: Foreign property investment paper

ScreenHunter_01 Jun. 08 23.33 By Leith van Onselen As noted earlier, the Abbott Government has today announced that it will implement the parliamentary inquiry's recommendations to tighten data collection, surveillance and penalties surrounding foreign investment in Australian residential real estate. The announcement has been accompanied by a consultation paper, with a closing date for submissions on 20 March 2015. Below are some key highlights from this paper, with sub-titles added for navigational purposes. Current Regime: Non-resident foreign persons are generally prohibited from purchasing established dwellings...
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Abbott announces new foreign property investment regime

ScreenHunter_4459 Oct. 13 10.08 By Leith van Onselen Just in from ABC News 24, Prime Minister Tony Abbott and Treasurer Joe Hockey have held a joint press conference announcing that the Government will implement the parliamentary inquiry's recommendations on foreign property investment. Specifically, a $5,000 fee will be levied on all non-resident purchases of Australian property with the $200 million of funds raised to be used to bolster FIRB surveillance and enforcement of the rules, and to set up a central database of property ownership. The announcement of the $5,000 fee goes further than that recommended by the O'Dwyer...
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Is the Sydney property bubble “rational”?

rationality From Richard Wakelin, dynastic property partisan, via the AFR: ...might the Sydney property boom peter out in a benign way without the Reserve Bank keeping interest rates artificially high for the rest of the nation? Much of the strong price growth in Sydney is "catch-up". Even after its recent dash, prices in Sydney are only up 57 per cent since September 2003, based on ABS data, while Melbourne rose 89 per cent in that time. To some extent, we may well be seeing a return to normal circumstances where Sydney property enjoys a 20 per cent premium over its southern counterpart due to higher incomes, a...
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Merrill Lynch: Get off your butt, APRA

1 Two apologies today. The first is to Alex Joiner, senior economist at Merrill Lynch, for following our precision-challenged national media yesterday in ascribing again his work to his colleague, Saul Eslake. The second apology is also to Mr Joiner, for insisting that he (in the form of an Saul Eslake facsimile) put heat on APRA rather than the RBA in his analysis. That is precisely what he did do yesterday even if the MSM didn't have the wit (or agenda) to see it. So, with permission, here is yesterday's the full note by ALEX JOINER on Australia's interest rate and housing conundrum. In Focus:...
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Interest-only loans continue to rise

APRA-ADILoanNewLVRDec2014 Cross-posted from Martin North's DFA blog. APRA released their quarterly Property Exposure data to December 2014 today. We see continued strong growth in interest only loans. From DFA research we know these are mostly investment loans, despite the fact that APRA does not split out loan characteristics by investment and owner occupation. We think they should. At a portfolio level, as at 31 December 2014, the total of residential term loans to households held by all ADIs was $1.28 trillion. This is an increase of $28.3 billion (2.3 per cent) on 30 September 2014 and an increase of $105.4 billion...
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Kohler on track to nowhere on housing costs

ScreenHunter_5080 Nov. 20 10.36 By Leith van Onselen Alan Kohler has today penned a piece in Business Spectator arguing that a lack of urban rail infrastructure is primarily to blame for Australia's unaffordable housing: The reason inner-city prices have gone up much faster than the outer suburbs, and that capital city house prices generally have almost doubled in 10 years, with Sydney prices in particular surging 35 per cent in three years, is because a lack of infrastructure investment has made it unviable to live further out... The failure of Australian governments to invest in public transport -- apart from in Victoria --...
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Pascometer burns red on first home buyers

ScreenHunter_6177 Feb. 23 09.10 By Leith van Onselen Weeoo, weeoo, weeoo. The Pascometer, Fairfax's Michael Pascoe, has come out swinging today, arguing that the so-called demise in first home buyers (FHBs) is "rubbish": You know the story about first home buyers squeezed out of the market, forever beaten at auctions, sometimes spun with an undertone of foreigners robbing "our children" of their birthright? It's rubbish... FHBs are running at around 25 per cent of the total home-buying market and maybe more than that of new dwellings. A closer inspection of the ABS' own figures shows the reality is a great deal more than that...
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Auction clearances explode

ScreenHunter_06 May. 13 11.32 The national auction clearance rate rocketed over the weekend, driven by big surges in Sydney and Melbourne, which drove the preliminary national clearance rate up to 77.7% from 70.0% last week and 76.2% at the same time last year. Sydney’s clearance surged by 9.9% to 87.8%, whereas Melbourne’s rose 7.5% to 74.9%. Brisbane, which typically only has a small number of auctions, also experienced a big lift in its clearance rate (up 23.3%% to 68.9%). Overall auction volumes (2,248) were also up significantly on last weekend’s 1,365. The Real Estate Institute of Victoria reported a...
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RP Data weekly housing market update

ScreenHunter_6077 Feb. 15 19.10 Click to view Core Logic-RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 22 February 2015. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New listings...
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Sea levels and bank caution on coastal property

article-2552027-1B37C5C600000578-289_964x640 One of the more interesting of the dimensions of the climate change debate is the very large and clear divergence in reactions between business interests that are impacted negatively by carbon mitigation and those that are impacted negatively by doing nothing. Perhaps unsurprisingly, sectors in the former group tend to be skeptical, but those in the latter group are busy preparing. If you live coastal, you might find yourself in the latter category sooner than you think. From Banking Day: Insurers and banks are beginning to focus on the risks of rising sea levels for property values, New...
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RP Data weekly Australian house price update

ScreenHunter_15 Mar. 05 15.42 By Leith van Onselen In the week ended 19 February 2015, the Core Logic-RP Data 5-city daily dwelling price index, which covers the five major capital city markets, fell 0.06% (see next chart). Home prices rose in rose in Sydney and Adelaide, were flat in Melbourne, but fell in Brisbane and Perth (see next chart). So far in February, home values nationally have risen by 0.10%, with values in Sydney, Melbourne and Adelaide rising and Brisbane and Perth falling (see next chart). Since the beginning of the year, home values have risen strongly in Sydney and Melbourne, but fallen...
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Queensland’s slowing housing activity

ScreenHunter_06 May. 15 16.47 By Leith van Onselen Below is a quick update on the latest fortnightly State Government data on housing transfers and mortgage lodgements for Queensland. As shown below, the number of housing transfers and mortgage lodgements (including refinancings) bottomed in December 2012 and has been rising gradually ever since, commensurate with Queensland housing prices. However, the trend is slowing and appears to be approaching an inflection point: The number of mortgage discharges has, since 2008, easily outnumbered the number of mortgage lodgements. However, the difference appears to be...
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Residential land prices goin’ vert!

ScreenHunter_5080 Nov. 20 10.36 By Leith van Onselen The Housing Industry Association (HIA) and RP Data have released their latest Residential Land Report, which reveals that median vacant lot price across Australia hit a record $212,727 as at September 2014 after rising by 3.3% over the quarter. At the same time, turnover in the national land market declined by 16.7% over the quarter (see next chart). Capital city lot prices rose by 4.7% in the quarter to be up by 10.0% compared to the September 2013 quarter. By comparison, land prices in Regional Australia rose by 0.7% over the quarter to be up 3.5% over the...
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Rental vacancies fall, but Perth and Darwin stuffed

ScreenHunter_07 Jul. 17 21.09 By Leith van Onselen SQM Research has released rental vacancies data for January, which registered a 0.3% decline over the month, but a 0.1% increase year-on-year (see below table). As shown above, falls were recorded in all capitals cities, with the biggest declines in the big population centres of Melbourne, Brisbane, Canberra and Sydney, as workers and students sought accommodation after the summer break. Over the year to January, Hobart recorded the biggest yearly decline in its vacancy rate, down to 1.3% from 1.6% at the same time last year. Modest falls were also recorded in...
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IPA defends foreign property investors

ScreenHunter_6135 Feb. 18 08.47 By Leith van Onselen Chris Berg from the Institute of Public Affairs (IPA) has attacked the Abbott Government's crackdown on illegal purchases of existing dwellings by non-residents, claiming that it is a diversion from the need to boost housing supply, as well as a "political gambit designed to play to the assumed xenophobic instincts of the electorate". From ABC's The Drum: Lots of reasons have been advanced for Australia's high house prices. Some people blame negative gearing. Others blame things like first-home owners grants, or loose lending standards by the banks, or the Reserve Bank's...
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The return of the high LVR mortgage

ScreenHunter_6093 Feb. 16 13.20 From News.com.au: MULTIPLE lenders have eased requirements on borrowers’ deposit sizes making it easier to buy a home... New data from comparison website Finder.com.au shows lenders including Homeloans, HSBC, loans.com.au, Macquarie Bank, RAMS and Westpac have moved their LVRs on some mortgage products, relaxing the size of the deposit needed to secure a loan... Finder.com.au spokeswoman Michelle Hutchison said borrowers who had small deposits and were taking out a loan at a time when interest rates were at record lows was a “recipe for disaster”... According to the financial comparison...
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Who’s to blame for Australia’s property bubble?

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen Some of you would have seen the RBA's testimony on Friday to the biannual House of Representatives Economics Committee, in which the Bank denied being primarily responsible for inflating Australian housing values: ...the first two of those questions [from students] focused on how they might hope to buy into a housing market that has become very expensive. Mr Stevens acknowledged the problem, but denied that low interest rates were the biggest culprit for recent surges in home prices in some locations, particularly in Sydney. "The biggest enemy for first home buyers is...
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BIS: Mortgages kill productivity

ScreenHunter_6080 Feb. 16 07.22 By Leith van Onselen The Bank for International Settlements (BIS) has released a new report examining the negative relationship between the rate of growth of the financial sector and the rate of growth of total factor productivity. The report finds that growth in the financial sector reduces an economy's total factor productivity growth by disproportionately benefiting high collateral/low productivity projects, such as housing: In this paper, we study the real effects of financial sector growth and come to two important conclusions. First, the growth of a country's financial system is a drag on...
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